Thursday, February 2, 2017

Two become one : merger of CBS and Entercom creates a massive local radio ownership presence

CBS Radio, which has been up for salefor the better part of the past year, will merge into Philadelphia area-based Entercom Communications Corp, it was announcedearly this morning.

Financial terms of the deal, expected to close in the second half of this year, were not released.
CBS Radio owns 117 radio stations in 26 markets while Entercom, already the fourth-largest U.S. radio company, has 127 stations in 27 markets. There will be some overlap so it will be interesting to see if Entercom sells off some properties in certain markets like Boston.

Five CBS Radio properties in Boston are : WBZ/NewsRadio 1030, WBZ/98.5 "The Sports Hub", WBMX/Mix 104.1, WZLX/100.7 Boston's Classic Rock and WODS/Amp 103.3. CBS Radio's FM stations occupy old TV38 building on Leo Birmingham Parkway in Brighton. WBZ 1030 shares studio space with its TV namesake on Soldiers Field in Allston.David J. Field, CEO of Entercom, will lead the combined company that will have a nationwide footprint of 244 stations, including 23 of the top 25 U.S. markets, as well as digital and events platforms. Entercom is already the fourth-largest U.S. radio company and will move up to second behind IHeartMedia. Entercom owns five stations in the Boston market : WEEI/Sports Radio 93.7, WAAF 107.3, WKAF/The New 97.1, WEEI/ESPN 850, WRKO 680/The Voice of Boston. All stations are inside New Balance's growing Boston Landing development on Guest Street in Brighton.The combined company will be known as Entercom and will be based in suburban Philadelphia, with a significant ongoing presence in CBS Radio’s headquarters of New York. Upon closing, the company’s board of directors will consist of nine members: five current Entercom directors, including Field as chairman, and four directors nominated by CBS Radio. CBS shareholders will control 72 percent of the combined company's shares while Entercom shareholders will control 28 percent.Revenue for the two companies combined over the past 12 months was about $1.7 billion – which would make it the second-largest radio station owner in the nation after Iheart Media.CBS Radio owns 117 radio stations in 26 markets while Entercom, already the fourth-largest U.S. radio company, has 127 stations in 27 markets. There will be some overlap so it will be interesting to see if Entercom sells off some properties in certain markets. It's likely that Entercom may need to shed one or two signals in this deal but based on various media reports, there will be no change in the two prized sports radio outlets - 98.5 The Sports Radio and Sports Radio 93.7. Both brands which have developed quite a rivalry over the past 7 years and Entercom brass will continue on with two sports signals in the market. WEEI has a rich 7-year Red Sox extension which begins this season. WBZ is holding onto one of the biggest jewels in local sports - New England Patriots radio rights. WBZ is the flagship for Boston Celtics, Boston Bruins and New England Revolution games.The sale also includes the national CBS Sports Radio Network operation that has 300 station affiliates around the country. WBZ 98.5 carries CSRN overnights and weekend evenings. WEEI is affilaited with ESPN and NBC Sports Radio. WEEI 850 is leased out to ESPN Radio on 24/7 basis and serves as Boston College sports flagship.CBS Corp's CEO Less Moonves said the radio division was up for sale early last year but then the company said it would spin it off via an IPO. Those plans were apparently scrapped due to recent talks with Entercom. The merger will be effected through a complex “Reverse Morris Trust” transaction, which is expected to be tax-free to CBS and its stockholders. As part of the transaction, CBS shareholders will have the opportunity to exchange all, some, or none of their CBS shares for CBS Radio shares.Immediately following the completion of this exchange offer, CBS Radio will merge with an Entercom subsidiary, with the new CBS Radio shareholders receiving Entercom shares in exchange for their CBS Radio shares in the transaction.BRW Notebook :Who's on first, what's on second... : Somewhat related to today's massive story above, Barrett Sports Media along with a panel consisting of 53 radio industry members has posted their top 20 Major Market Morning Shows for 2016. 98.5 The Sport's Hub Boston's Toucher & Rich came in 2nd and WEEI's Kirk & Callahan were 4th. Full list is here.